Pinnacle Entertainment Inc. cut the rates it is offering to pay on $1.6 billion of loans it is seeking to fund the acquisition of Ameristar Casinos Inc.
The operator of seven casinos and a racetrack is proposing to pay 2.75 percentage points more the London interbank offered rate on a $1.1 billion 7-year, term loan and an equally ranked three-year, $500 million debt portion, according to a person with knowledge of the financing, who asked not to be identified because the terms aren’t set. That compares with an initial offer of 3.5 percentage points more than the lending benchmark that the Las Vegas-based company was planning to pay. The debt will still have a one percent minimum on Libor.
The seven-year loan will be sold at an original-issue discount of 99.75 cents versus 99 cents originally planned. The three-year debt will be offered at par. JPMorgan Chase & Co. and Goldman Sachs Group Inc. are arranging the financing and the commitments are due today.
Pinnacle is expected to complete the purchase as early as this quarter after it reached a “tentative agreement” with the Federal Trade Commission, according to a June 17 statement.